Gold subdued as risk appetite grows; weaker dollar, yields lend support
By Brijesh Patel
Aug 2 (Reuters) - Gold prices were on the back foot on Monday as an uptick in risk appetite took some shine off the safe-haven metal, although a weaker dollar and a fall in U.S. bond yields limited losses for the bullion.
Spot gold was down 0.2% at $1,809.73 per ounce by 10:02 am EDT (1402 GMT).
U.S. gold futures fell 0.3% to $1,811.30 per ounce.
"There's a slight lesser need for safe havens as the equity markets are surging higher once again this morning," said David Meger, director of metals trading at High Ridge Futures, adding U.S. jobs data later this week will key event risk.
"However, the underlying premises post Federal Reserve meeting is an environment that is conducive to the yellow metal moving forward."
The S&P 500 index neared a record high as a $1 trillion infrastructure bill and strong second-quarter corporate earnings lifted sentiment.
Focus now shifts to July's U.S. non-farm payroll numbers, due on Friday, that is expected to shed more light on the health of the labour market.
Last week, Fed Chairman Jerome Powell said interest rate hikes were "ways away" and the job market still had "some ground to cover", lifting gold prices to a two-week high of $1,821 per ounce last Thursday.
"We may be seeing a little bit of corrective action in gold. It ran into resistance just above $1,830 again which may have triggered a little profit taking," OANDA analyst Craig Erlam said.
"The dollar and yields are a little lower which should be supporting prices. If both remain low, I suspect gold may see some support once more," he added.
Offering some respite to gold, the dollar index slipped 0.2% against its rivals, while benchmark U.S. 10-year Treasury yields fell to a near two-week low.
Elsewhere, silver fell 0.2% to $25.42 per ounce, palladium rose 0.7% to $2,678.50 and platinum gained 1% to $1,059.03. (Reporting by Brijesh Patel in Bengaluru Editing by Alistair Bell)
